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New holdings focus on energy efficiency and renewables

The news flow during the first month of the year was dominated by the coronavirus and its spread. This inevitably led to concerns in the markets globally. Long-term interest rates moved down quite sharply, while Stibor continued to move upwards during the first half of the month.

The market got back into action again after the seasonal holidays, primary transactions gained renewed momentum, and Carnegie Investment Grade participated in a couple of issues during the month.

It is clear that investor demand remains high. Stenvalvet is a real estate company with a focus on community properties like health and social care facilities, schools, governmental authorities and the judiciary. It is diverse in terms of both property holdings and tenants. Stenvalvet has a strong ownership base and we regard it as a stable operator in the segment. Its bond has a maturity of 5 years and pays Stibor +95 basis points. To finance the purchase of Stenvalvet we chose to reduce our position in Arla.

Mowi, a Norwegian company and one of the largest salmon farmers in the world, issued a green 5-year euro-denominated floating rate bond. We have currency hedged this to Swedish kronor.

Another new holding is real estate company Balder. Balder has a large defensive portfolio with a focus on housing and stable tenants. We have invested in a 3-year and a 4.5-year bond, both with variable interest rates and both green. The money will be used for projects aimed at improving the energy efficiency of buildings and increasing the share of renewable energy. The fund also took a new position in Nordax Bank. In addition, exposures to Norway were increased with purchases of Storebrand and power company BKK.

Carnegie Investment Grade rose 0.16% this month.

Carnegie Investment Grade is a fund focused on Nordic corporate bonds with high credit ratings. We are in a low interest rate environment, which of course poses a challenge, but strong and stable companies that have a sustainability focus are an attractive combination, and we see sound prospects to achieve a good return over time.

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